Sater Tax Fraud Case Dismissed

The case of Felix Sater, former associate of President Donald Trump, has been dismissed by the Manhattan court. Most did not expect the civil tax fraud case to have any other outcome aside from dismissal, despite being a $250 million case. Sater and his co-founded real estate company, Bayrock, had been prosecuted by Fred Oberlander in what is called a qui tam case: a whistleblower (in this case, Oberlander), can file to prosecute on the state’s behalf. Interestingly, Oberlander formerly represented Sater’s former business partner, Jody Kriss, in another suit against the company involving money-laundering.

From the beginning, Oberlander claimed in a press release that Attorney General Eric Schneiderman had greenlit the case; however, Schneiderman notified the Supreme Court afterwards, in February of 2016, that this was “misleading” of his press release and that he and the state, rather, “expressly declined to intervene.” Schneiderman’s office did maintain that they would monitor the case. The qui tam case was filed by Oberlander using information that had already been stricken from the original case involving Kriss, likely at least part of the grounds for dismissal of the case.

After confirming the case’s dismissal, Sater’s lawyer, Robert Wolf, maintained that it had been dismissed not on procedure but on its merits. In the proceedings, Fred Oberlander and another involved lawyer, Richard Lerner, were referred to the Department of Justice two times due to their criminal contempt and misconduct towards Sater. Lerner has mentioned his plans to appeal the dismissal of this specific qui tam case against Sater.

Looking back to 2010, Sater and founder of BayrockTevfikArif were accused by Jody Kriss of racketeering, money laundering, and fraud; eventually, the case moved forward as a racketeering case. Kriss claimed that the company was frequently involved "in a pattern of continuous, related crimes, including mail, wire, and bank fraud; tax evasion; money laundering; conspiracy; bribery; extortion; and embezzlement." He similarly described the company as "substantially and covertly mob-owned and operated." Kriss did not take part in the qui tam case that was brought by Oberlander and recently dismissed.

Kriss’ accusations of Sater and Arif included the beginning of their negotiations with the Trump Organization having taken place in 2003, describing the involvement as using the organization as a branding tool to market projects while misleading Trump as to Sater’s criminal past. From a 2007 deposition Trump maintains that knowledge of Sater’s criminal past would have changed things, and the Trump Organization would not have partnered with the company to develop Trump SoHo. Trump also claimed that he would be unable to pick Sater out of a room, seemingly announcing his lack of familiarity to Sater.

Conversely, Sater and others describe his relationship with Trump quite differently. In another deposition Sater allows that he and Trump had met constantly. Kriss claims that Trump was known to value Sater’s loyalty and his Russia connections. Trump himself called Russia “one of the hottest places in the world for investment,” stating that not investing in it was “ridiculous.” Last, it is also known that in Trump Tower, Bayrock’s office was only two floors down from Trump’s. An anonymous contributor also stated that Sater and Trump had weekly standing meetings, thus confirming Sater’s stance that they did, in fact, meet constantly and know each other.